Judge Dismisses 3rd Amended Complaint in Securities Suit Against Antares

Judge Michael Shipp of the District of New Jersey on Friday dismissed the third amended complaint brought by an individual against Antares Pharma and company executives in a proposed class action stemming from alleged downplaying of adverse side effects of an Antares product.

Plaintiff Randy Smith’s litigation arose from claims that the defendants misled Antares investors about results of clinical trials of QuickShot Testosterone (QST), a testosterone replacement therapy product. Smith proposed a class that would include those who bought Antares common stock from Dec. 21, 2016, through Oct. 12, 2017

The plaintiff claimed that clinical studies on the drug showed an increased risk of high blood pressure and that the defendants knew this, but they chose to “consciously … downplay its significance instead of disclosing the direct link between QST and elevated blood pressure.” Further, the plaintiff alleged that the defendants inaccurately reported suicide and depression instances correlating with QST use, according to the third amended complaint. As a result, these omissions, along with eight instances identified by the plaintiff where the defendants made allegedly false or misleading statements, caused artificial inflation of Antares share prices in violation of the Securities Exchange Act of 1934, according to the plaintiff.

Smith’s third amended complaint is nearly identical to his second, which was dismissed by the court April 28, 2020, for failure to sufficiently plead that the defendants knowingly made false or misleading statements and that some of the statements were false or misleading at all, the court explained. The court dismissed the third amended complaint based on similar reasoning.

An added allegation was that Antares or its executives made statements that QST was a “virtually painless treatment experience.” The court quoted the defendants to show that the plaintiff failed to demonstrate that these statements were material to investors, as “(a)ny reasonable investor would understand this statement to be a commentary on injection pain — not safety or adverse events.”

The third amended complaint also attempted to metabolize the claims of an anonymous witness into fodder for the plaintiff’s argument that the defendants knew about the adverse events risk and thus knowingly deceived the public. According to the witness, patients were monitored for hypertension and surveyed about depression before being let into the study, and those whose results showed high blood pressure and/or a history of depression were excluded. The court found that this allegation does not stand because the Food and Drug Administration (FDA) had made recommendations for who to involve in clinical testing, so any exclusion was on behalf of the FDA and thus could not show intentional malfeasance. The court found the witness’ other allegations failed as well for being generalized and conclusory.

The court concluded that the plaintiff did not remedy its previously dismissed allegations that attempted to illustrate economic loss and that the loss was caused directly by the defendants, among other claims.

The plaintiff is represented by Lite DePalma Greenberg & Afanador. The defendants are represented by Dechert.